ATOT's Second Annual Tax Time Thread!

[FoBoT]

how much of charitable contributions in cash (to a church) are deductible? is it 100% 50% or 30% ? or does it depend on stuff

i thought it used to be 100% ? did it change?

 

[Pliablemoose]

I just cut a check to the IRS for $10.7K sob...

I always use H&R Block, yeah I know it's a waste of $, but I'm lazy

 

[Armitage]

What do I need to know about filing considering that I was divorced in May 2004? So married for 4 months, single for 8 in 04
Any chance I can deduct any of the settlement I had to pay her, or any of the legal expenses?

Thanks

 

[EagleKeeper]

Originally posted by: FoBoT
how much of charitable contributions in cash (to a church) are deductible? is it 100% 50% or 30% ? or does it depend on stuff

i thought it used to be 100% ? did it change?

Cash is king

Everything else depends on what it is.

 

[EagleKeeper]

Originally posted by: Armitage
What do I need to know about filing considering that I was divorced in May 2004? So married for 4 months, single for 8 in 04
Any chance I can deduct any of the settlement I had to pay her, or any of the legal expenses?

Thanks

Shaft-amony is deductible - there is a line item for it.
The cost of applying the shaft and lubricant is not.

If you have no children, you will file as single, otherwise as head-of-household

 

[Armitage]

Originally posted by: EagleKeeper

Originally posted by: Armitage
What do I need to know about filing considering that I was divorced in May 2004? So married for 4 months, single for 8 in 04
Any chance I can deduct any of the settlement I had to pay her, or any of the legal expenses?

Thanks

Shaft-amony is deductible - there is a line item for it.
The cost of applying the shaft and lubricant is not.

I don't think its alimony - just the payout for the property settlement.

If you have no children, you will file as single, otherwise as head-of-household

I have two kids. As part of the settlement, I can claim one of them for taxes. Since I pay all of the childcare expenses for both kids, can I claim all of that, even though I'm only claiming 1 dependent?

Thanks!

 

[EagleKeeper]

Originally posted by: Armitage
I don't think its alimony - just the payout for the property settlement.

If you have no children, you will file as single, otherwise as head-of-household

I have two kids. As part of the settlement, I can claim one of them for taxes. Since I pay all of the childcare expenses for both kids, can I claim all of that, even though I'm only claiming 1 dependent?

Thanks!

Look closely how the settlement is structured.
IRS - FAQ - Alimony
Look at Pg 12 - General rules



Daycare expenses are limitied
IRS - FAQ - Child and Dependent Care Credit

For 2003, you may use up to $3,000 of the expenses paid in a year for one qualifying individual, or $6,000 for two or more qualifying individuals. These dollar limits must be reduced by the amount of any dependent care benefits provided by your employer that you exclude from your income.

What is a ?qualifying? child or dependent? The child must have been under age 13 when care was provided and you must be able to claim the child as an exemption on your tax return. (For an exception to this rule, see Child of Divorced or Separated Parents in IRS Publication 503.) A spouse who is mentally or physically unable to care for himself or herself also qualifies. A dependent of any age who is physically or mentally incapable of self-care also qualifies if the person can be claimed as an exemption on your tax return (or could have been claimed, except for the fact that the person had $3,050 or more of gross income).

Look closely to see if the second child will qualify for expenses.
Or have the daycare restructure the billing to accomidate as much as possible your tax situation.

 

[Mo0o]

This is a really noob question but what is the minimum amount I need to earn to file? And are W2s basically just a summary of all the money you made in a year?

 

[EagleKeeper]

Originally posted by: Mo0o
This is a really noob question but what is the minimum amount I need to earn to file? And are W2s basically just a summary of all the money you made in a year?

If taxes were taken out (of any type) one should file.
There is a minimum amount of earnings that you can make before your wages become taxable. This varies for each person according to circumstances.

The W2s are a summary of income paid to you from a given company.
One can also have reported income using a 1099 Form.

Question for you and others.

Is basic economics, civil government and taxes no longer taught in High School?

 

[Mo0o]

Originally posted by: EagleKeeper

Originally posted by: Mo0o
This is a really noob question but what is the minimum amount I need to earn to file? And are W2s basically just a summary of all the money you made in a year?

If taxes were taken out (of any type) one should.
there is a minimum amount of ernings that you can eearn before your wages become taxable. This varies for each person according to circumstances.

The W2 are a summary of income paid to you from a given company.
One can also have reported income using a 1099 Form.

Question for you and others.

Is basic economics, civil government and taxes no longer taught in High School?

Nope.

Last year I made about... $3000 dollars from workstudy. Do I need to file or can i just use the nonfiler form and submit it to my school?

 

[EagleKeeper]

Originally posted by: Mo0o

Originally posted by: EagleKeeper

Originally posted by: Mo0o
This is a really noob question but what is the minimum amount I need to earn to file? And are W2s basically just a summary of all the money you made in a year?

If taxes were taken out (of any type) one should.
there is a minimum amount of ernings that you can eearn before your wages become taxable. This varies for each person according to circumstances.

The W2 are a summary of income paid to you from a given company.
One can also have reported income using a 1099 Form.

Question for you and others.

Is basic economics, civil government and taxes no longer taught in High School?

Nope.

Last year I made about... $3000 dollars from workstudy. Do I need to file or can i just use the nonfiler form and submit it to my school?

If you were provide some type of official government form showing income and taxes paid, then you should file. If you do file, make sure that you select the correct classification options for status and dependency.

 

[babanewbie]

my wife sold some stocks for her first time and got a hunk a change from it, now do we have to wait for a certain W-form for doing that and should we expect a good or bad thing from it? we just dont want to owe anything. thanks.

 

[EagleKeeper]

Originally posted by: babanewbie
my wife sold some stocks for her first time and got a hunk a change from it, now do we have to wait for a certain W-form for doing that and should we expect a good or bad thing from it? we just dont want to owe anything. thanks.

You should get a 1099 from the broker.

In reality, you should have already the transaction statement.

Use the Schedule B/1040 to list the transaction.
You will fill out what the initial cost total was and what the cost total that the stocks were sold. Subtract fees from buying/selling and the difference will be capital gains.

You will then have to calculate the tax on the gain and add it to the tax on your income.

The same goes for stock losses.

 

[archcommus]

Here's a Q: What should I worry about keeping? As of now I keep my pay stubs and bank statements, my W-2s and the printed copy of my federal taxes from TurboTax. What receipts should I make sure to keep all year long (for itemizing as much as possible)?

Also, if I file my state and local by hand, how do I get my own copy like TurboTax did for me after it was accepted by the IRS?

 

[omco6]

Wondering if I can get by with using a tax program or should take my stuff to someone? bought a house last march, sold a piece of land around the same time and lived in the state I work in only half the year
Thanks

 

[EagleKeeper]

Originally posted by: omco6
Wondering if I can get by with using a tax program or should take my stuff to someone? bought a house last march, sold a piece of land around the same time and lived in the state I work in only half the year
Thanks

You will have to put in between 2-10 hours to collect and organize all the information no matter who does the paperwork

Then either pay someone $100-$200 to do 1 hours worth of work, or you spend $20 -$30 on Tax S/W and put in 2 hours work.

Decide what is more valuable.

All the information that you need to do your taxes seems to have been posted and responded to in this thread. Spend a couple of hours skimming through the thread to get the answers.

 

[archcommus]

Originally posted by: archcommus87
Also, if I file my state and local by hand, how do I get my own copy like TurboTax did for me after it was accepted by the IRS?

I pretty much know what I need to file them, but I'm asking what receipts I should keep for things that can be written off. Should I basically just keep receipts for everything that's listed in Schedule A?

 

[EagleKeeper]

Originally posted by: archcommus87

Originally posted by: archcommus87
Also, if I file my state and local by hand, how do I get my own copy like TurboTax did for me after it was accepted by the IRS?

I pretty much know what I need to file them, but I'm asking what receipts I should keep for things that can be written off. Should I basically just keep receipts for everything that's listed in Schedule A?

Anything that is needed to backup your claims for expenses should be saved.

I will usually scan all documents, and zip up the scans with then burn on a CD along with the tax file. Easer to keep track of one CD than a folder full of papers.

 

[archcommus]

Sounds like a good idea. I'd probably want to keep the paper trail and do what you do in addition to that. Definitely would need to be on a CD, too, I wouldn't want to keep a copy of any papers on my computer if it had my SSN and all that on it.

So the final question, how do you come about having your own copy of the return when you file and mail the regular form?

 

[jEnus]

Two years ago my parents claimed me and used the Hope credit as I was going to colledge. Last year I claimed myself and used the Hope credit again. Can I use the hope credit again this year since I've only claimed it on myself once?

You can claim a Hope Credit for only two tax years for each eligible student. An eligible student can be you, your spouse, or your dependent for whom you claim an exemption.

 

[EagleKeeper]

Originally posted by: archcommus87
Sounds like a good idea. I'd probably want to keep the paper trail and do what you do in addition to that. Definitely would need to be on a CD, too, I wouldn't want to keep a copy of any papers on my computer if it had my SSN and all that on it.

So the final question, how do you come about having your own copy of the return when you file and mail the regular form?

COPY MACHINE!!!

 

[EagleKeeper]

Originally posted by: jEnus
Two years ago my parents claimed me and used the Hope credit as I was going to colledge. Last year I claimed myself and used the Hope credit again. Can I use the hope credit again this year since I've only claimed it on myself once?

You can claim a Hope Credit for only two tax years for each eligible student. An eligible student can be you, your spouse, or your dependent for whom you claim an exemption.

Hope Credit is only to be used for the first two years of college. After that you must use the LLC.

/edit - removed comment due to mis-understanding of information provided.

 

[jEnus]

Originally posted by: EagleKeeper

Originally posted by: jEnus
Two years ago my parents claimed me and used the Hope credit as I was going to colledge. Last year I claimed myself and used the Hope credit again. Can I use the hope credit again this year since I've only claimed it on myself once?

You can claim a Hope Credit for only two tax years for each eligible student. An eligible student can be you, your spouse, or your dependent for whom you claim an exemption.

Hope Credit is only to be used for the first two years of college. After that you must use the LLC.

You actually should file a 1040X and remove the Hope Credit for 2003 and change it over to a LLC. This will create a tax liability for you.

I don't understand how this would create a tax liability for me? (What is a tax liability?)

 

[EagleKeeper]

Originally posted by: jEnus

Originally posted by: EagleKeeper

Originally posted by: jEnus
Two years ago my parents claimed me and used the Hope credit as I was going to colledge. Last year I claimed myself and used the Hope credit again. Can I use the hope credit again this year since I've only claimed it on myself once?

You can claim a Hope Credit for only two tax years for each eligible student. An eligible student can be you, your spouse, or your dependent for whom you claim an exemption.

Hope Credit is only to be used for the first two years of college. After that you must use the LLC.

/edit comment removed - incorrect response was provided due to mis-interpretation of question.

I don't understand how this would create a tax liability for me? (What is a tax liability?)

The below informaiton is for reference purposes only.

The original question was mis-interpreted and therefore the response provided is not applicable to the original poser of the question.

However, for anyone who may chose to try and manipulate the system, the information below shoudl be observed and stored away..


The Hope Credit generates a 50% tax credit.
The LLC generates a 20% credit.

Therrefore your tax liability will be 30% of what ever you used to determine the Hope Credit. You will owe taxes against the extra taxable money - tax liability.

Example Only:
You have $5000 of educational costs.
Hope saves you 50% of that - $2500
LLC saves you 20% of the - $1000
The diference is $1500. That will be taxable.
Assume that your tax bracket for 2003 was 18%
Additional tax owed is $270 + 5% back interest
Total would be $284 that would be owed and have to be paid when the 1040X is filed.


That is money that Uncle will eventually cross reference and ask for back. Plus if he does find out about it before you admit to it, then there will be penalties (due to percieved fraud) as well as the back interest.

The tax fraud is due to the Hope is to be used only for the first two years of college. If you used it for the third year of college, that is fraudulent filing in their eyes. This is because you deliberately used a form that is clearly documented as for the proper educational use.

To claim the Hope Credit, the student for whom you pay qualified tuition and related expenses must be an eligible student.

Did not have expenses that were used to figure a Hope Credit in any 2 earlier tax years.
Had not completed the first 2 years of postsecondary education (generally, the freshman and sophomore years of college) before 2004.

It may take 2-3 years for them to track you, but there is no expiration time frame for fraud.
Every month that you delay filing the ammended 1040x is more interest accumulated.
Also, Uncle could disallow the LLC for you from then on.
You can be sure that your returns will be flagged for checking by an auditor for the next 3-5 years.

 

[jEnus]

In 2003 I was in my 2nd year of college. Why would I want to change that to a LLC and then have to pay taxes? Since that was the 2nd time of using the Hope Credit on me (1st by my parents when I was claimed as a dependent), how would this be fraud?